July 13, 2012 / 4:46 AM / 7 years ago

Your Practice: Five questions to test your disaster plan

(Reuters) - After spending a weekend last month watching the Waldo Canyon wildfire approach her city of Colorado Springs, Colorado, Lisa Forbes had no question about how to start her work week.

Houses in the Mountain Shadows subdivision are seen leveled after the community was ravaged by the Waldo Canyon fire in Colorado Springs, Colorado July 2, 2012. Residents began returning to charred areas of Colorado Springs on Sunday after the most destructive wildfire in Colorado history forced tens of thousands of people from their homes and left the landscape a blackened wasteland. The so-called Waldo Canyon Fire has scorched 17,659 acres (7,149 hectares), burned 346 homes and devastated communities around Colorado Springs, the state's second-largest city, since it began eight days ago. REUTERS/Adrees Latif

Forbes, an adviser with Ameriprise Financial, pulled out copies of the business continuity plan that she had never expected to need and reviewed it with her staff. Things went smoothly when they evacuated the next day, but Forbes knows she got lucky because she had several days to prepare.

The fire — the most destructive on record in Colorado — didn’t damage Forbes’ office, but it exposed holes in her evacuation procedures. Now that she’s back in her office, she’s strengthening her plan by getting important documents backed up electronically and better delegating evacuation responsibilities.

As the most dangerously active wildfire year in the Western U.S. continues and the height of hurricane season approaches the East Coast, here are five critical questions about evacuation planning you should be able to answer. If you can’t, it’s time to review your plan.

1) Can I easily forward calls to an outside line?

A common challenge cited by advisers who recently had to evacuate their office was forwarding their phone to an outside line. Adrian Day, president of Annapolis, Maryland-based Adrian Day Asset Management, found that it took a couple of days during a recent power outage before he could get the phone company to forward his office line to his home.

A better option is to make sure you have a phone system that allows you to forward the calls. Reach out to your phone vendor for instructions if you don’t know how to do this. Another smart move is to keep a prepaid cell phone on hand, so that if you must evacuate, you have a dependable number available.

Linda Leitz, co-owner of Colorado Springs-based Pinnacle Financial Concepts Inc., said that when she had to evacuate her office during the wildfire, using her prepaid cell phone let her keep her regular phone reserved for calls from family.

Another tip: record a greeting that says to only leave a message in case of an emergency. This helped Leitz cut down on the many calls she was getting from well-meaning acquaintances who were just checking to see how she was doing.

2) Are my critical documents backed up and secure?

Ameriprise’s Forbes said that while her client data was backed up electronically, there was a lot of firm information, including important financial statements regarding her business, that she had only on paper. Now that she’s back in her office, she’s making it a priority to digitize all of those documents.

To make sure all your electronic information stays safe, Ed Friedman, a practice management consultant and senior partner at New York-based Friedman Consulting Group, recommends that advisers make sure their internal server is backed up at an outside location. This will also help your team work remotely.

Prefer to outsource the work of backing up your data? Consider using companies that can back up data online, such as Carbonite or Iron Mountain. Alternatively, see if your broker-dealer offers options for helping back up your data, suggests Kevin Feehily, vice president with Boston-based Byrnes Consulting LLC.

3) Do I have hard copies of key information offsite?

If you have to flee your office for your home, you’ll want to have a list waiting for you with the contact information for all your clients, employees and other critical resources, like the relationship manager at your custodian and the property manager for your office.

Other important pieces of information you should have offsite: Instructions on how to forward your office calls; update your voicemail message and post alerts on your website. You’ll also want a hard copy of the passwords for your voicemail, email and remote log-in.

4) Have I done a drill to test for holes in my plan?

Ameriprise’s Forbes recommends that advisers take an afternoon to run a mock evacuation drill. Hammer out a plan with staff to determine who will take what documents, and then give them two hours to pack everything up and load their cars.

You should also test out your calling tree — the chart showing the chain of phone calls staff members should make to check that everyone from the office is safe.

Calling trees are notoriously faulty so it’s important to keep yours updated and to have the person at the end of the chain call back the leader to confirm that all the calls have been made, said Friedman, the consultant.

5) Have I tested a way to mass communicate with my clients?

One of the first things you want to do after evacuating is to send out a mass email to your clients to let them know what’s going on. Bear in mind that if you create a mass email for hundreds of people, it could get misidentified as spam.

To avoid this, consider signing up for an email service provider like Constant Contact or Vertical Response, which can give your message a professional look, make sure it gets delivered and then give you confirmation on who has read it. Constant Contact charges $15 a month; Vertical Response charges about 1 cent per email address that you send to, or as low as $8.50 a month for unlimited emails.

Feel free to then place phone calls to all of your clients, but if you’re looking to save time, consider setting up a conference call to address their concerns.

All of this contingency planning will make it easy for you to focus on what your priority should be: staying available.

“The key with this, whether it’s with your employees or your clients, is communication,” Friedman said.

Reporting By Jennifer Hoyt Cummings; Editing by Walden Siew and Leslie Adler

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